What’s Next In The Struggle To Make College More Affordable

July 31, 2013

Jane Yurechko

Now that a student loan interest-rate bill has passed the Senate and is almost certain to pass the House this week, it is time to take a closer look at our long-term goal for higher education: making college affordable for all students.

President Obama touched upon this point in his speeches on the economy last week, assuring that he would be pressing forward with an aggressive college affordability policy. The fight is not yet over; we still have much we can, and should, do.

Obama’s plan suggests pushing new efforts to train workers for jobs, a community college-to-career initiative connecting more students to skill training for high-tech jobs, and making sure students are getting the most out of their degree by shortening their path to graduation and blending teaching with online learning.

Here is a closer look at some of those ideas and what they could contribute to a comprehensive and progressive solution to the challenge of making college more affordable:

1. Beef up Pell Grants.

The maximum Pell Grant in the 2002-2003 school year covered 98 percent of the average public four-year tuition and fees. Today that maximum grant – $5,550 – only covered 64 percent of tuition fees and room and board in 2012-2013. At a private four-year college, the maximum Pell Grant covered close to a quarter of average private nonprofit four-year tuition and fees in 2002-03; it now covers less than a fifth.

The White House has suggested doubling investment in Pell Grants, and the United States Student Association urges that Pell Grant funding be a mandatory part of the federal budget; in other words, funding would be based on what’s needed to cover who is eligible, not on the whims of Congress. Pell Grants have not kept up with the cost of higher education, and it is time to show our commitment to higher education by increasing that funding.

2. Expand community colleges and other options besides four-year institutions.

The White House’s plan advocates bringing community colleges together with businesses in order to define a clear path to jobs. David Bergeron, the Vice President for Postsecondary Education at the Center for American Progress agrees with the White House and urges expanding apprenticeships. That would take pressure off of colleges, reduce loan burdens, and help employers who need skilled labor.

3. Increase state funding of higher education.

Since the start of the recession, all but two states have made dramatic cuts in state funding to public universities. This ranges from North Carolina, cutting 14.6 percent of funding, up to Arizona, cutting funding by 50.4 percent.

It is important for states to be supporting public education, and cuts in funding have contributed to increasing tuition costs. Increasing state funding has been suggested by the National Education Association, the White House, and the United States Student Association. President Obama’s plan would reward colleges that offer lower net tuition and provide a good value to students. We should also scrutinize how colleges use federal money, and offer incentives to use technology to drive down costs.

4. Employ new methods of tuition with Pay it Forward plans.

Lawmakers and students in Oregon, California, and Washington have put forward plans to eliminate student loans and the traditional tuition payment method altogether.

The Oregon legislature has passed a law allowing the Higher Education Coordination Commission to develop a pilot program focused on the Pay it Forward, Pay it Back concept, to be considered by the legislature in 2015. Instead of paying tuition while at school, students would commit a small percentage of their future incomes to paying the state back after graduating from college. These programs would require a large initial investment, but by year 25, according to the plan developed in Washington state, the program would be self-sustaining.

There have been some criticisms of this program, particularly regarding whether such a program could really be self-sustaining. But this should not hold Oregon and other states back from developing and testing pilot programs to see how well this system can work and learn what needs to be fixed as the program progresses.

5. Expand online learning.

The other new path universities are going down is increasing the use of massive open online courses. Universities can create and offer these courses for a very low cost.

Critics of online courses fear that they would provide students with a lower quality education and lack the benefits of face-to-face interaction. But there are studies that show students who take part of these online classes online perform better than those in traditional instruction – students took one-quarter less time to learn as effectively as those in the classroom, according to a study done at the University of Central Florida. In addition, online classes could be coupled with traditional instruction so they would not eliminate the need for high-quality professors.

6. Refinance existing student loan debt at lower rates.

There are multiple proposals to allow students to refinance their loans at lower rates. The most compelling is New York Sen. Kristen Gillibrand’s Federal Student Loan Refinancing Act. It would refinance most government loans carrying interest rates above 4 percent into fixed, 4 percent loans.

Another proposal by Rep. Karen Bass (D-Calif.) would enroll existing borrowers into what’s called the 10/10 program: Students upon graduating would pay 10 percent of their discretionary income for 10 years; afterward any remaining debt would be forgiven.

We need to keep ideas like these in the upcoming debate over the reauthorization of the Higher Education Act this fall in order to get an outcome that gets costs under control and supports our students’ pursuit of a college degree.